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AllyAutoReport Information for U.S. Auto DealersNew Model Launches StealHeadlines, But Used MarketRebound Continues to ShineThe average length of new vehicle ownership isestimated to be about six years. Looking at therolling six-year sum of new light vehicle sales asa proxy for the potential supply of used vehiclesshows that supply will bottom in 2013 beforerebounding in 2014, keeping prices relatively high.However, downward pressure on pricing is stillevident, with the potential supply of younger usedvehicles – proxied by the four-year rolling sumof new light vehicle sales – expected to increase9% Y/Y in 2013 after bottoming in 2012. Further,NADA expects off-lease vehicles to increaseapproximately 250K units in 2013. This is in-linewith the start of the V-shaped recovery in new lightvehicle sales starting in 2010 as the majority ofleases have three- to four-year terms.While this improvement in younger used-vehiclesupply may signal some gross margin compressionfor used vehicle sales, this segment will continue toremain important given the expected improvementin volume and higher profit margin versus newvehicle sales.Roughly 30%of the vehiclessold in the U.S.by JapaneseOEMs areimported.4Used VehicleSales VolumeRatio toNewLt. VehicleSalesUsed VehicleSales &VolumeandRatioto NewLVS3.545403.030Ratio252.020151.5101.00.5Million Units352.552007200820092010201120120Used: Franchise (RHS)Total Used excl. Franchise (RHS)Total New/Used (LHS)Used: Franchise/New (LHS)Sources: Ally Economics, BEA, CNW ResearchPotentialUsedVehicleSupply:New Light Vehicle SalesRolling4 Year& 6 YearSum105Rolling Sum of New LVS, Mil. UnitsWhile it’s tempting for dealers to focus attention onthe new models featured in this year’s auto showintroductions, the used vehicle market shouldcontinue to offer stronger opportunities to growprofits in 2013. The segment is expected to post aY/Y sales increase for the fourth consecutive yearand maintain a larger gross margin compared tonew vehicles (current gross margin levels for usedvehicles are about 12% vs. an approximate 4%margin for new vehicles, according to NADA).Ally E C O N O M I C SNew Light Vehicle Sales Rolling 4-Yr & 6-Yr Sum9585756555452007 2008 2009 2010 2011 2012 2013 2014 20154 year4 Yr. Forecast6 year6 Yr. ForecastSources: Ally Economics, BEA, Blue ChipThe Yen: Why Did It Weaken, Why Does It Matter?Factors Driving A Weaker YenShinzo Abe was elected Japan’s Prime Minister inDecember 2012. Since then, he has announcedradical plans to end the country’s deflationaryenvironment. These plans are aimed at stimulatingJapan’s domestic economy through largepublic works projects and other emergencystimulus spending. Abe has further announcedhis intentions to pressure the central bank tofight deflation and weaken the yen. For now, thecommitments of Abe’s cabinet to execute hisannounced measures have significantly weakenedthe yen against the U.S. dollar.For an export-oriented economy, a weaker yen isbeneficial. For instance, a Japanese manufacturingfirm selling an exported product in the U.S. forUS 1 would have received 80 yen in November2012 but that same 1 can be exchanged for 90yen today, giving more money to the firm whensales in U.S. dollars are converted back to theJapanese yen.Implications to the U.S. Auto MarketRoughly 30% of the vehicles sold in the U.S. byJapanese OEMs are imported, and many of thevehicles built here in North America use partsimported from Japan. By vehicle segment, manyluxury vehicles are imported. For instance, allLexus vehicles except for the RX are importedfrom Japan. For Infiniti vehicles, all but the JX(soon to be renamed Q60) are imported fromJapan. Additionally, all of the Toyota Prius familyContinued on page 5

AllyAutoReport Information for U.S. Auto DealersAlly E C O N O M I C SUpbeat Housing Outlook is Encouraging for Auto SalesThe impressive growth in auto sales in 2012coincided with the first year of compelling evidencethat housing had bottomed and growth wasemerging. Last year, the housing market deliveredits best performance since 2005. Many othermeasures also saw their strongest performance inyears and a stabilization in prices may be removingsome buyer hesitation. As a result, it’s no surprisethat housing and autos both had their best yearsince the crisis as they have historically beenclosely linked.First, the construction of new homes is expectedto advance in 2013 as indicated by the rapid runup in the NAHB Homebuilders Sentiment index,a measure of how optimistic builders are aboutpotential sales. It surged in the second half of 2012to its highest level since 2006. Historically, 03Light Vehicle Sales(RHS)10.0FHFA HPI 6 mo. ahead(LHS)7.5Apr04Japanese Yen per One U.S. DollarApr08Apr09Apr10Apr11Apr12Apr135.0Secondly, the recovery in the housing market itself will likely support consumerdemand for autos. As consumers get more comfortable making expenditureson their largest expense, housing, they are likely to concurrently, or shortlythereafter, become more comfortable with expenditures for the second largest,autos.Even for consumers not participating in the homebuying market, the expectedincrease in home prices could lead to more auto purchases. As rising pricesease the burden of negative equity or “underwater homes,” more buyers arelikely to become comfortable in making an auto purchase that they may havebeen putting off for a number of years due to a sense it was not financiallyprudent. This “wealth effect” of rising asset prices is well documented ineconomic literature and is illustrated for home prices in the chart above.The yen is appreciating (strengthening) against the U.S. DollarThe Yen: Why Did it Weaken, WhyDoes It Matter?Continued from page 4of vehicles are imported. Thus, the exchange rateis a critical factor for Japanese OEMs to conductbusiness in the U.S. market.798183858791Apr07of large homebuilding increases have coincided with gains in pickup truckssales, which are a key capital component of new construction. The pickup trucksegment is dominated by the Detroit 3 and they are well positioned to benefitfrom strength in this segment.7789Apr06Sources: Ally Economics, Haver AnalyticsThe Ups And Downs Of TheYenThe Yen75Apr05Millions, SAARFavorable trends in housing are widely expectedto continue in 2013. Home sales are quiteencouraging, ending 2012 at their best level since2006 and with more growth anticipated in 2013.Home prices have beenrising since the spring“.more buyers areof 2012 and held uplikely to becomein the winter months,comfortable inwhich suggestsmaking an autoresilience. Inventoriespurchase that theyare at their mostmay have beenfavorable since 2004,putting off for aeasing pressure onnumber of years.”prices and supportingnew constructionactivity. These positive factors favor the automarket given the close relationship between thestrength of the housing market and auto sales. Inparticular, there are two channels through which ahealthy housing market could boost sales.HomePrices and Auto SalesHomes Prices and Auto SalesThe yen is depreciating (weakening) against the U.S. DollarJan Mar May11 11 11Jul11Sep Nov Jan Mar May11 11 12 12 12Sources: Ally Economics, Federal ReserveJul12Sep Nov12 12Jan13For now, many OEMs (both Japanese and Detroit3) have publically stated that the recent weakeningof the yen against the dollar has not impacted thebusiness in a significant way. Part of the reasonis that firms typically lock in prices over the life oftheir contracts. However, a persistently weak yengoing forward may provide incremental advantageto the Japanese OEMs by raising these contractprices in Yen terms.5

AllyAutoReport Information for U.S. Auto DealersAlly E C O N O M I C SAlly Auto Industry Health Index Risesat Fastest Pace Since Early 2010Auto sales fell to 15.2 million SAAR in Januaryfrom 15.3 in December, but the level remainedabove 15.0 million SAAR for the third consecutivemonth and well above the 2012 average of 14.4million. In addition, the positive momentumshown in the Health Index suggests thatunderlying economic fundamentals supportrenewed sales growth in 2013 and are conduciveto an above 15.0 million sales volume in 2013. Thesharp acceleration in the index over the last fewmonths has been largely driven by employmentand income categories. Continued strength fromthese areas of the economy will foster optimismfrom consumers and businesses and, as a result,propel sales notably in subsequent months.Ally Auto Industry Health Index21Auto Report is abi-monthly publicationto provide insight forU.S. auto dealers.We welcome yourcomments andsuggestions atautoreport@ally.comCurrent and previousissues are online atmedia.ally.com/auto-report.0-1-2-3Jan 13Jan 12Jan 11Jan 10Jan 09Jan 08Jan 07Jan 06Jan 05Jan 04Jan 03Jan 02Jan 01Jan 99Jan 00Auto Health Index-4-5Jan 98( Growth above Trend)In January, the Ally Auto Industry Health Index roseto its highest level since early 2012 and marked thesixth consecutive positive reading. With the indexrising at its fastest pace since early 2010, the newlight vehicle sales market is positioned to continueits dramatic recovery in 2013, and to do so at theupper end of expectations for sales in the mid-15.0million range. The sharp increase in the index alsobodes very well for the trajectory of new lightvehicle sales through the year. The notablestrength implies that sales should trend higherquite consistently from current levels throughmost of 2013 and close out the year with anupward trajectory.Source: Ally EconomicsDisclaimersThe information presented in this report was prepared by Ally Financial Inc. or one of its affiliatesprior written permission of Ally, this information and any other Ally intellectual property may not be(collectively “Ally”) for informational purposes only and does not constitute the provision ofreproduced, redistributed or used including in respect of the development of any financial products,investment advice or a research opinion as to the value of any company or security. Nothing inincluding any indices.this report constitutes an offer, or a solicitation of an offer, to buy or sell any security or financialinstrument.This information in this report is provided on an “as is” basis. The user assumes the entire risk of anyuse made of this information. Ally, its affiliates and any third party involved in, or related to, computingThe information presented is believed to be reliable and has been obtained from public sourcesor compiling the information hereby expressly disclaim all warranties of originality, accuracy,believed to be reliable, but Ally makes no representation as to the accuracy or completeness of suchcompleteness, merchantability or fitness for a particular use or purpose with respect to any of thisinformation and it may be incomplete or condensed.information. Without limiting any of the foregoing, in no event shall Ally, any of its affiliates or anyAll opinions, estimates and projections in this report constitute the current judgment of the authoras of the date of this report, and they do not necessarily reflect the opinions of Ally and are subject tothird party involved in, or related to, computing or compiling the information have any liability for anydamages of any kind. Ally accepts no liability whatsoever for the actions of third parties.change without notice. Ally has no obligation to update, modify or amend this report or to otherwiseThis report may provide the addresses of, or contain hyperlinks to, websites. Ally has not reviewednotify any recipient in the event that any information, opinion, estimate or projection changes orany such website and Ally takes no responsibility for, and makes no representations or warrantiesbecomes inaccurate. Neither Ally, nor any of its officers, directors, employees or agents has anywhatsoever as to, the data and information contained in any such website. Website addresses orliability whatsoever for any direct, indirect or consequential loss or damage arising from any use ofhyperlinks are provided solely for convenience and information and the content of the website doesthis report.not in anyway form part of this report. Accessing or using any information from any such website shallWhere included in this report, Ally sourced information is the exclusive property of Ally. Without the6be at the risk of the user and Ally has no liability arising out of, or in connection with, the accessing ofor the use of any information contained in any such website.This report may be duplicated or redistributed only with the prior written permission of 2010 Ally Financial Inc.Ally Financial Inc.

Ally has revamped its system to enable direct dealer access to leads with an efficient and professional marketing fulfillment service. This will help Ally increase its financing contract volume, while enabling dealers to better service their valued customers. Ally enhances dealer services Tim Russi President - Auto Finance, Ally Financial